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ChartWatch: Companies tally millions in gains, losses from grid-crippling freeze

Several electricity and natural gas providers have warned of significant financial impacts from the deep freeze that swept across the Western U.S., while other energy companies expect to benefit from the supply constraints and related price hikes.

Just Energy Group Inc. on Feb. 22 said it could record a total of US$250 million, or C$315 million, in losses from the brutal cold stretch of weather that prompted widespread blackouts in Texas.

The retail energy provider also warned that the financial impact could be "materially adverse to the company's liquidity and its ability to continue as a going concern."

The uncertainty from the extreme weather event in Texas prompted Just Energy to withdraw its fiscal 2021 guidance and delay the filing of its financial statements for the three and nine months ended Dec. 31, 2020.

Increased demand and rolling outages in Texas caused Just Energy to balance power supply at very high clearing prices through the Electric Reliability Council Of Texas Inc., "artificially set at USD $9,000/MWh for much of the week."

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The Public Utility Commission of Texas on Feb. 15 directed ERCOT to adjust wholesale energy prices to ensure they accurately reflect current conditions amid the state's energy emergency.

Power providers Vistra Corp. and NRG Energy Inc. were initially believed to have the most exposure to generation outages in ERCOT given their large generation fleets in the state. Irving, Texas-headquartered Vistra on Feb. 17 disclosed only about 1,000 MW of its more than 19,000 MW of generation was offline during the widespread generation outages.

As fully integrated power providers, NRG and Vistra also own large retail electricity companies in Texas. Vistra has a "long" position, with more generation in Texas than retail load, while NRG has more retail load than generation. On Feb. 22, NRG pushed its planned release of earnings results to March 1, because President and CEO Mauricio Gutierrez is scheduled to appear before the Texas Legislature on Feb. 25.

Natural gas distribution company Atmos Energy Corp. reported accruing about $2.5 billion to $3.5 billion in natural gas purchases due to "unforeseeable and unprecedented market pricing" during the winter storm. Atmos said it was considering several options to cover the costs, including tapping short-term or long-term debt and issuing equity.

Meanwhile, natural gas producers Comstock Resources Inc., Antero Resources Corp. and EQT Corp. are among those expected to cash in on the surge in fuel prices.

"We feel very fortunate to be able to have gas in storage at a time when it's needed in a big way," Energy Transfer LP co-CEO and Chief Commercial Officer Marshall McCrea said on a Feb. 17 earnings call. "We hate what's going on in the country, in this state, but we're doing everything we possibly can to pull gas out of storage and deliver it to the power plants and to the LDCs."

The economic impacts of the energy crisis also were felt outside of the U.S.

Canadian solar and wind developer Innergex Renewable Energy Inc. expects a financial hit of between C$45 million to C$60 million as a result of realized losses on power hedges.

Algonquin Power & Utilities Corp., a Canadian company that owns U.S. utilities, said Feb. 19 it expects a negative financial impact of $45 million to $55 million on 2021 adjusted EBITDA from the winter storm. The company said it has asserted force majeure and is assessing other potential mitigating options.

German power producer RWE AG, which owns more than 3 GW of mostly wind capacity in Texas, said the outages and unfavorable pricing conditions will trigger a "significant negative earnings impact" for its onshore wind and solar segment in the U.S.